This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.

A Couple of Airline Stocks Cleared for Takeoff

Trading Central

Contributor:
Trading Central
Visit: Trading Central

By:

Head of North American Research Trading Central

The Airline industry has been beaten down since the start of the coronavirus pandemic as travel is halted to help stop the spread of the virus. The Dow Jones U.S. Airline index is down 54% year-to-date while the S&P 500 has recovered over half of its March decline which is now down 10% year-to-date. As countries begin to pass peak infection levels there may be some interesting opportunities to purchase companies that have been hit the hardest in the pandemic.

Using Trading Central’s technical event screener, I searched for U.S. airline stocks that have confirmed a bottom reversal technical pattern. Bottom reversal patterns occur after a downtrend followed by a breakout from a trading range.

More about Trading Central

Trading Central is a global leader in financial market research and investment analytics for retail online brokers and institutions. Trading Central’s product suite provides actionable trading ideas based on technical and fundamental research covering stocks, ETFs, indices, forex, options, and commodities.

What we found

Alaska Air Group (ALK:NYSE) Prices seem to have reached a bottom, showing signs of a reversal after prices broke to the upside after a period of uncertainty (consolidation).

ALK Daily

A Bottom Triangle shows two converging trendlines as prices reach lower highs and higher lows. Volume diminishes as the price swings back and forth between an increasingly narrow range reflecting uncertainty in the market direction. Then well before the triangle reaches its apex, the price breaks above the upper trendline with a noticeable increase in volume, confirming this bullish pattern as a reversal of the prior downtrend.

Delta Air Lines (DAL:NYSE) Prices reached a bottom after failing to break through a support level and have started to rise higher signaling a reversal to a new uptrend.

DAL Daily

The Double Bottom pattern forms during a downtrend as the price reaches two distinct lows at roughly the same price level. Volume reflects a weakening of the downward pressure, tending to diminish as the pattern forms, with some pickup at each low, less on the second low. Finally, the price breaks upward above the highest high to confirm the bullish signal.

The investment ideas presented here are for information only.  They do not constitute advice or a recommendation by Trading Central in respect of the investment in financial instruments. Investors should conduct further research before investing.

Gary Christie is head of North American research at Trading Central in Ottawa.

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Trading Central and is being posted with permission from Trading Central . The views expressed in this material are solely those of the author and/or Trading Central and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

trading top